General Dynamics NASSCO was today awarded $744 million to build a pair of 765 foot auxilliary ships for the Navy, an infusion of money that will reduce the company's need to lay off workers due to a long-term slump in construction orders.

The Navy also said it might give NASSCO the contract to build a third Mobile Landing Platform (MLP) vessel as it moves ahead with a new class of ship that will be used to pre-position supplies. The "pier-at-sea" ship project could be worth $1.3 billion to NASSCO, the last major shipbuilder on the West Coast.

The news comes as a critical time for the San Diego shipyard, which employs 3,600 people, making it one of the county's largest defense contractors. NASSCO said earlier this spring it would eliminate up to 350 jobs due the decline in new construction and a delay in ship repair orders caused by Congressional debate over the federal budget.

"There will still be some layoffs, but they will be significantly less than what we were talking about," said James Gill, a company spokesman.

NASSCO recently laid the keel of the USNS Cesar Chavez, the 14th and final Lewis and Clark-class dry cargo ship it is building for the Navy. The company has struggled to find contracts to replace that project, which was worth more than $7 billion to NASSCO. But the defense budget was recently passed, allowing NASSCO to begin $37 million in repair work on the frigates Curts and Vandegrift, and on the Pearl Harbor, a Navy dock landing ship.

NASSCO President Fred Harris told the Union-Tribune in late April that "we'll be able to begin cutting steel immediately" if the company landed the MLP contract. The firm is preparing to do that, and expects to deliver the first of the new ships to the Navy in fiscal 2013 and the second in fiscal 2015.

MLP represents a departure for the Navy, which is pursuing a "seabasing" plan that would allow the Navy and Marines to pre-position everything from tanks and ammunition to food on a ship that would operate like a pier. Dry cargo ships like that ones that have been built over the past decade at NASSCO would transfer supplies to the MLP, where they would be stored until they were need on shore. The MLP would be able to berth ships and handle helicopters, essentially giving the military a forward operating base located at sea.

"The MLP ship would be capable of entering a harbor, but it wouldn't necessarily have to," Gill said.